Dive Brief:
- Industry-wide freight ton kilometers (FTKs) grew by 5.7% in December 2017, three percentage points lower than in November, the International Air Transport Association (IATA) reported.
- Freight capacity grew at a rate of 3.3%, slightly slower than November's growth rate of 4.0%.
- December 2017 was the 17th month in a row in which air freight demand grew at a faster rate than capacity.
Dive Insight:
Although both air cargo demand and supply grew at relatively sluggish rates in the last month of 2017, the year overall witnessed soaring demand for air freight. FTKs rose 9% last year — the strongest year of volume growth since 2010. In comparison, AFTKs rose only 3% — one third the pace of demand.
The rising demand correlates with a strong global trade market, along with a favorable market for business and manufacturing.
Trade certainly isn't the only factor, however, as air cargo volumes grew more than twice as fast as global trade volumes, according to IATA. E-commerce and pharmaceutical transport in a temperature-controlled environment are also contributing to increased air cargo demand.
All airline regions showed FTK growth, but Africa was the clear chart topper. Cargo volumes on African airlines grew 25.2% last year, compared to just 3.7% in 2016. The strong uptick comes as air freight traffic and trade have increased between Africa and Asia.
For 2018, it's unclear if global trade will continue to grow at strong rates. Numerous regulatory factors — everything from the U.S. imposing tariffs on raw materials to NAFTA negotiations hanging in the balance — could lead businesses to view global trade more dubiously.
